Shin Kong Financial (2888) Q3 2024 earnings summary

Executive summary

• Consolidated after-tax profit for the first nine months of 2024 reached NT$19.73bn, with total assets at NT$5.1tn and shareholders' equity up 6.4% quarter-on-quarter to NT$287.54bn; book value per share was NT$16.1.

• Shin Kong Life's profit surged 245.4% year-on-year to NT$11.53bn, Shin Kong Bank's profit grew 5.5% year-on-year to NT$5.50bn, and MasterLink Securities' profit increased 46.6% year-on-year to NT$2.92bn.

• Achieved AAA in MSCI ESG rating, DJSI World Index inclusion, and won multiple TCSA, GCSA, and sustainability awards.

• On October 9, 2024, shareholders approved the merger with Taishin FHC.

Financial highlights

• First-year premium (FYP) rose 20.5% year-on-year to NT$36.44bn, with a 6.2% market share; FYPE grew 3.7% year-on-year to $14.7bn.

• Foreign currency policy sales accounted for 54.6% of FYP, totaling NT$19.90bn.

• Consolidated net income for 9M 2024 was NT$19.73bn, up from a loss of NT$693mn in 9M 2023; EPS improved to NT$1.24.

• Investment return after hedging increased 88 bps year-on-year to 3.92%, driven by higher equity gains.

• MasterLink Securities' operating revenue surged 40.7% year-on-year to NT$9.22bn, with brokerage income up 39.7% and proprietary trading income up 48.0%.

Outlook and guidance

• Targeting annual hedging cost below 150 bps for 2024.

• Full-year wealth management income is expected to exceed annual guidance, achieving double-digit growth.

• Plans to deepen cross-selling synergies, grow digital income, and promote sustainable operations.

• Four-year net interest spread expected to remain stable, with net interest margin projected to rise.

• SKL will continue to promote FX policies and high CSM products to control hedging cost and accumulate CSM.